COLORADO CHAPTER APPRAISAL NEWS Appraisal ™ Institute Volume 13, No. 2 — July, 2003 Professionals Providing Real Estate Solutions
Editor: W. West Foster, MAI www.colo-ai.org Publisher: Carol Brooks
FRIDAY, AUGUST 8, 2003 The Colorado Chapter of the Appraisal Institute presents Potpourri Seminars (Free to Members) LOCATION: Denver Board of Realtors Presenter: Ron Collins, FHA 4300 E. Warren Ave. Topics: Sales Concessions Denver, CO New Flipping Rule Repair Conditions (VC Sheet) SCHEDULE: 7:30 a.m. – 8 a.m. Registration 3 p.m. – 5 p.m. and Continental Breakfast Update Re: Central Platte Valley 8 a.m. – 10 a.m. Presenters: Amy Fuller – East West Partners Dichotomy or Dementia - Mark Falcone - Continuum The Apartment Market in 2003 Topics: Future Plans Presenters: Cary W. Bruteig, MAI Long Term Value and Why Pedestrian Apartment Appraisers and Consultants Environment and Urban Design drive it Jeff Hawks Product Design/Residential & Apartment Realty Advisors Commercial Topics: Merchant builders buy apartments instead of selling them CONTINUING Each seminar: 2 hours Investor interest surges while the EDUCATION: (8 hours CE if you attend all 4 seminars) apartment market dives Appraisal Institute AND State of Colo. There is excess investment capital, but buyers borrow anyway FEE: FREE to Members –Includes: 10 a.m. – noon Continental Breakfast, Breaks, Easements for High Tension Lines Seminars, Handouts and Lunch!! Presenters: Michael H. Earley, MAI, SRA $50 – all others (guests welcome) Earley and Associates Al Wilson A. R. Wilson, LLC REGISTRATION: See page 12 EVERYONE MUST Topics: Property Rights and Easements REGISTER. EVEN IF YOU Transmission Lines vs. Property Values ARE A MEMBER (FREE)! EMF/Electrical Interference Statistical Analysis of Proximate QUESTIONS: Call 303-691-0487 Properties (outside Denver – 1-800-571-0086) web site: www.colo-ai.org Noon – 1 p.m. Sack Lunch (included!) (click on “Seminars”, scroll to “PotPourri”) Chapter Meeting 1 p.m. – 3 p.m. FHA and Today’s Market
IN THIS ISSUE: 2003 Officers and Directors ...... 2 President’s Corner ...... 5 They Went That-A-Way ...... 9 Advertising Policy ...... 2 Region II Meeting ...... 5 Classifieds ...... 9 Colo. Chapter’s 2003 Region II Leadership Development and Advisory Edward B. Horton, MAI, SRA, National Representatives ...... 2 Council Attended by Colorado SREA President–1966 Passes Away . . . . 10 Third Annual Sept. Event...... 2 Representatives ...... 6–7 Valuation Conferences Provide Welcome ...... 4 Editorial Ramblings ...... 8 Overview of Appraisal Greetings from the Government Relations Letter to the Editor ...... 8 Opportunities/Challenges...... 11 Committee ...... 4 “Quality without Quantity” ...... 8 The “Antique” Appraisers ...... 12 Tribute to Mark A. Edgar, MAI, SRA ...... 4 Education Recap ...... 9 In Memoriam...... 12 2003 OFFICERS AND DIRECTORS Third Annual September Event!!! Colorado Chapter of the Appraisal Institute Copper PRESIDENT: Dennis L. Roelker, SRA Mountain Littleton ...... 303-779-5314 VICE PRESIDENT: September 19, 20, John (Jack) W. Nisley, MAI Grand Junction ...... 970-242-8076 21, 2003 SECRETARY/TREASURER: Richard G. Stahl, MAI, SRA Englewood ...... 303-858-8880 x12 Mark your Calendars: DIRECTORS: Matthew E. George, SRA Littleton ...... 303-721-7007 FREE CONTINUING EDUCATION FOR MEMBERS David M. Kilty, SRA NON-MEMBERS - $50.00 PER DAY Denver ...... 303-757-0980 Larry S. Massey Denver ...... 303-936-7280 Dates: Harold S. McCloud, MAI Friday, September 19 Aurora ...... 720-747-4710 1 p.m. - 5 p.m. Seminar James R. Meurer, MAI, SRA Golden ...... 303-278-3066 Denver Updates: Bret R. Poole, MAI Union Station Denver ...... 303-297-0400 Fitzsimons Wm. Michael Rinner, MAI Convention Center Expansion Englewood ...... 303-662-0155 Martin W. Ward, MAI, SRA 5 p.m. - 6 p.m. Social Hour Boulder ...... 303-443-9600 Christopher S. Weaver, MAI Saturday, September 20 Monument...... 719-481-3669 8 a.m. – Noon Seminar PAST PRESIDENT: Food for Thought John A. Schwartz, MAI Aurora ...... 303-671-7511 1 p.m. - ? Golf – contact Randy Pierzina, SRA 303-932-2362 Advertising Policy (Price & location to be determined) 7 p.m. Group Dinner $ 25 per person 1. Advertisements must be camera-ready. JJ’s at B Lift 2. Advertisements must represent closely-related businesses or services to the real estate appraisal field. 3. All advertisements submitted for publication are subject Sunday, September 21 to the Editor and Publisher’s approval. 8 a.m. – Noon Seminar 4. Appeals for rejections will be submitted to the Board of Directors and their decisions are final. Affordable Housing 5. Fees are as follows: Member Non-Member Continuing Education: 12 hours (Colorado State and Full Page 7" x 10" $165 $175 Appraisal Institute) FREE FOR MEMBERS 3 Half Page 7" x 5" or 3 ⁄4" x 10" $ 90 $100 1 1 Quarter Page 3 ⁄2" x 4 ⁄2"$50$60 1/8 Page (Bus. Card size) Topics, speakers, registration infor- 1 3 ⁄2" x 2" $ 30 $ 40 mation will be coming soon! Colorado Chapter does not endorse any product or service advertised in this newsletter. Visit our website: www.colo- Send camera-ready copy and check to: ai.org/seminars Appraisal Institute, 1540 S. Holly, #5, Denver, CO 80222 If you have questions, please call 303-691-0487 Outside Denver metro area 1-800-571-0086 www.colo-ai.org
COLORADO CHAPTER’S 2003 REGION II REPRESENTATIVES ONE-YEAR TERM TWO-YEAR TERM Sue Anne Foster, MAI, SRA – Greeley Matthew E. George, SRA – Denver John A. Schwartz, MAI completing term Jack W. Nisley, MAI – Grand Junction For Terry K. Hartlieb, SRA – Ft. Collins Martin W. Ward, MAI, SRA – Denver Claudia D. Klein, SRA – Colorado Springs ALTERNATE Richard G. Stahl, MAI – SRA, Denver Bonnie D. Roerig, MAI – Denver
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Page 3 GENERAL ASSOCIATES RESIDENTIAL ASSOCIATE Andrea J. Hartlieb W. Kevin Roark Bethany L. Cronk Gene Bircher Hartlieb Appraisal Services, LLC Arrowhead Real Estate Appraisals HVS International Front Line Real Estate Services P. O. Box 272268 1315 W. 4th St. 2229 Broadway 3000 S. Jamaica Ct., #195 Ft. Collins, CO 80527 Pueblo, CO 81004 Boulder, CO 80302 Aurora, CO 80014 Phone: 970-282-1206 Phone: 719-544-5516 Phone: 303-443-3933x213 Phone: 720-494-1919 Fax: 970-282-1246 Fax: 719-544-5715 Fax: 303-443-4186 Fax: 720-494-2588 E-mail: E-mail: E-mail: [email protected] E-mail: [email protected] [email protected] [email protected] Stuart W. Kauvar Kevin P. Cozzolino Jonathan D. Klinowski Chad Shirack Stuart W. Kauvar Appraisals, Inc. Arrowhead Real Estate Appraisals Majestic Appraisal Frontline 7752 E. Nassau Ave. 1315 W. 4th St. 1540 S. Holly St., #7 3000 S. Jamaica Ct. Denver, CO 80237 Pueblo, CO 81004 Denver, CO 80222 Aurora, CO Phone: 303-779-9014 Phone: 719-544-5516 Phone: 303-782-9333 Phone: 303-369-5774 Fax: 303-796-0327 Fax: 719-544-5715 Fax: 303-782-9050 Fax: 303-369-5883 E-mail: [email protected] E-Mail: kcozz@ E-mail: [email protected] E-mail: [email protected] Peter S. Leakas arrowheadappraisals.com Danye W. Landrum Roxie L. Strong James Real Estate Services, Inc. Debra G. Cromer 17065 Wellington Dr. Metropolitan Appraisers 90 Madison St., Ste. 300 24373 Rd. 122 Parker, CO 80134 3534 S. Lincoln St. Denver, CO 80206-5412 Ramah, CO 80832 Phone: 303-840-8729 Englewood, CO 80110 Phone: 303-316-6777 Phone: 719-541-8093 E-mail: [email protected] Phone: 303-761-5113 Fax: 303-388-8756 Fax: 719-541-3381 Jamie D. Magar Fax: 303-761-5166 E-mail: [email protected] E-Mail: [email protected] Fenix IronWorks Randal Wagner Michael B. Mazzola Leighann Shelton Dill P. O. Box 985 2000 Simms St. Mazzola Appraisal Service, Inc. P. O. Box 4136 Craig, CO 81626 Lakewood, CO 80215 76 S. Sierra Madre St., Ste. 211 0014 Burchwood Ct. Phone: 970-824-5081 Phone: 303-232-1956 Colorado Springs, CO Dillon, CO 80435 Fax: 970-824-5081 Fax: 303-232-3717 Phone: 719-475-8020 Phone: 248-967-6000 E-mail: [email protected] Mark D. Whitman Fax: 719-475-8021 Fax: 248-967-6258 Frank E. Mequet Whitman Appraisal Professionals, Inc. E-mail: [email protected] E-mail: Majestic Appraisal 12371 E. Cornell Ave. Joseph M. Moran [email protected] 1540 S. Holly St., #7 Aurora, CO 80014 Rocky Mountain Valuation Specialists Douglas R. Doudna Denver, CO 80222 Phone: 303-337-7990 393 S. Harlan, Ste. 120 Mountain Home Appraisals, Inc. Phone: 303-782-9333 Fax: 303-337-9008 Lakewood, CO 80226 P. O. Box 594 Fax: 303-782-9050 E-mail: [email protected] Phone: 970-547-1085 721 Grand Ave. E-mail: [email protected] Dana Yale E-mail: [email protected] Grand Lake, CO 80447 Elizabeth Million All Aspect Appraisals Tanya Pierson Phone: 970-627-8462 Million Appraisal Service 6099 Vivian St. HVS International Fax: 970-627-3395 170 Seminole Dr. Arvada, CO 80004 2229 Broadway E-mail: [email protected] Boulder, CO 80303 Phone: 303-423-0849 Boulder, CO 80302 Robert W. Ecker Phone: 303-499-9795 Fax: 303-940-4890 Phone: 303-443-3933 4950 Wood Brook Ct. Fax: 303-499-1392 E-mail: allaspectappraisals@ Fax: 303-443-4186 Colorado Springs, CO 80917 E-mail: [email protected] hotmail.com E-mail: [email protected] Phone: 719-597-2636 Duane A. Renick Carter Wilson E-mail: [email protected] Renick Appraisals, Inc. AFFILIATE MEMBER HVS International Martin A. Froehlich P. O. Box 27493 Fred E. Hogue 2229 Broadway 3444 Country Road 10 Denver, CO 80227 9655 Morrison Rd. Boulder, CO 80302 Gunnison, CO 81230 Phone: 303-936-0541 Lakewood, CO 80227 Phone: 303-443-3933 Phone: 970-349-0378 Fax: 303-936-0548 Phone: 303-980-0846 Fax: 303-443-4186 Fax: 970-349-0413 E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] Paul Rodriguez Bradley C. Gillespie PR Appraisal Services, LLC STUDENT MEMBER Arrowhead Real Estate Appraisals 5984 S. Prince St., #202 Bryan A. Reid 1315 W. 4th St. Littleton, CO 80120 Jr Engineering Pueblo, CO 81004 Phone: 303-904-4262 6020 Greenwood Plaza Blvd. Phone: 719-544-5516 Fax: 303-734-4200 Greenwood Village, CO 80111 Fax: 719-544-5715 E-mail: [email protected] Phone: 303-740-9393 E-Mail: bgillispie@arrowheadap- praisals.com
Greetings from the Government Tribute to Mark A. Edgar, MAI, SRA Relations Committee! Mark A. Edgar, 54, of Colorado Springs passed away on Matthew George, SRA (Government Relations Chair) May 15, 2003. He had a heart attack while scuba diving off the Galapagos Islands. Our goal is to keep you informed on the latest informa- He was a devoted father, coached baseball, and was very tion that affects us as appraisers. By far the best and involved with his family. His favorite pastimes included fly most current information in print is the free publica- fishing with his daughter, watching his son’s hockey games, tion put our by the Appraisal Institute: the Appraiser and traveling with his wife, Sue. News Online. If you are not reading that monthly arti- He was involved in several community organizations such as the Pikes Peak Association of Realtors, El Paso Club, cle you are flat missing out. Simply go online with our Real Estate Advisory Board for Pikes Peak Community local website and you can find it from there. College and the Advisory Committee for the Parks and Locally, we helped sponsor the Legislative Breakfast Recreation Board last April where we were able to meet a few State Mark appraised all kinds of property and was very Representatives and a few of their staff. It was an infor- highly regarded by the community and greatly respected by mal way to get to know people who are impacting our his peers. In speaking with some of his fellow professionals, government on a local basis. We’ll let you know when over and over again it was mentioned, “He was just a truly the next meeting will be. nice person.” Of course, if you have anything you feel we need to He is survived by his wife, Sue. His true legacy are his be aware of or to act upon, please call me or Carol. children, Tom and Kristin. Page 4 PRESIDENT’S CORNER by Dennis L. Roelker, SRA
We have now reached mid-year, and it is time to reflect on Recent Disappointments: the status of our chapter and to envision the future. With all the anticipation and promises by many of our members to participate Education: in the May 10, 2003 Multiple Sclerosis As most members are well aware, our chapter is financially Walk, this event was canceled due to an overwhelming and sound due to the responsible leadership exercised over the unexpected snowstorm. While many donations were still prior administrations. Our revenues continue to grow, due received by the MS Chapter, I did feel somewhat guilty primarily to our extensive and superior education program, receiving my MS T-shirt without even getting out of the car. resulting in a continuous surplus of funds. As a result, the However, it has given me even more determination to partic- prior and current chapter leadership has aggressively ipate in next year’s walk and to encourage other members to embarked upon a program to return to the membership a tan- join us for a most worthwhile cause. gible benefit. This has resulted in a program of free local sem- The most significant disappointment on a professional inars and education offerings for members of the Colorado level was the cancellation of this year’s annual conference to Chapter. In addition, substantial discounts on locally provided be held in Toronto, Canada as a result of the SARS crisis. While I was attending the Region II Conference in Omaha this national courses are available to our members, provided cer- past April, the question of holding or canceling the conference tain minor requirements are met. was broadly discussed. Although I personally was against can- Over the second half of the year, a host of events will be cellation initially, it became very apparent after further dis- available to the membership with FREE education opportu- cussion that cancellation was the only responsible choice to nities. Included are the following: be made. I wish to applaud our national leadership in making 1. July 11 — A two-hour seminar was held in Ft. Collins on the this most difficult decision, primarily for the safety of our topic “Transportation and Growth in Colorado.” It was fol- membership and their families. Hopefully, the positive bene- lowed by a round of golf. For those of you who have heard fit of this action will be an even greater interest and partici- that I have recently acquired a new set of golf clubs and pation in next year’s conference. therefore are reluctant to compete, please note that I still cannot break 100 on a typical day. Other Matters: 2. August 8 — A full day presentation, 8 hours of credit, to be Within the past two months, it was brought to my attention held in Denver, covering a variety of current day topics. that a member of our chapter was unable to fulfill their edu- Lunch is included and will be provided on the premises. cation requirement in a timely manner, jeopardizing the use This event will fill early, so your early registration is of their designation and Colorado license. While the matter strongly recommended. was eventually resolved, mostly through the efforts of our 3. September 19–21 — This is a three-day affair that will be outstanding and dedicated executive director, Carol Brooks, held in Copper Mountain offering 12 hours of credit and it is strongly recommended that each member carefully numerous after hours social events (at individual’s cost). review their course and education status to avoid a similar Members and their guests may attend all or part of the event situation. With the changing and varying experience credit and are sure to have a relaxing and enjoyable get-away. cycles by the Institute and the State, it is sometimes confus- ing as to what the requirements actually are and when they Get involved, participate in at least one of these events, and must be completed. But be advised, ultimately it is the indi- while earning required education credits at no expense, have vidual who is responsible to comply with all requirements of the profession. some fun with your fellow appraisers in a vacation setting. As a closing thought, I would like to remind the membership In conjunction with these free education services for our that the success of the chapter is a direct reflection of the partic- members, it has occurred to our leadership that we also ipation of the individual members. The benefits derived from would benefit by increasing our membership base with indi- participation in a professional organization extend well beyond viduals currently active in the appraisal profession or those peer recognition or financial gain, and it truly enhances the self individuals who are past members and have recently left the worth of the participant. organization. This was accomplished by offering extraordi- nary discounts to individuals that have enrolled in our local courses by crediting this course fee to membership dues, Region II Meeting thereby reducing the membership fee to a minimum cost. To carry the process to an even greater extreme, existing mem- bers were offered substantial discounts of 5 to 20% toward their future membership dues, for sponsoring new members to the organization. These generous and limited-time offers have already received an overwhelming response. Web Site: The Colorado Chapter web site is alive and improving on a continuous basis. Besides providing a current source of infor- Colorado Chapter was well represented in Omaha Nebraska at the mation on courses, seminars, events, membership, etc., it is an Region II meeting, April 26 & 27 hosted by the Nebraska and Iowa effective and convenient link to many of the data sources we Chapters. Heard via the grapevine, in addition to conducting business, rely upon in our routine assignments. It is interesting to note there was a wild game show that everyone enjoyed. Confirm this by con- tacting any of the Chapter members pictured: (front row, l to r) Sue Anne that our web site has been visited by individuals from over fif- Foster, MAI, SRA, Richard G. Stahl, MAI, SRA, Thomas J. Power, MAI, teen foreign countries in addition to countless other appraisers SRA, (back row, l to r) Richard C. Mosier, MAI, W. Michael Rinner, MAI, from around the country. Visit us at www.colo-ai.org and see Robert O. Stevens, MAI, SRA, John A. Schwartz, MAI, John (Jack) W. first hand the benefits available at the click of a key. Nisley, MAI and Matthew E. George, SRA. Page 5 Leadership Development and Advisory Council Attended by Colorado Representatives, April 2003 By Richard Mosier, Terry Ruth, Richard Laraia, and Larry Massey
Colorado sent four of its members to the Leadership is: government relations is personal and one-on-one. Kelli Development and Advisory Council in Washington, D.C. last Kline was the discussion leader, and she almost had me think- April. Those members are: Terry Ruth, Richard Mosier, Richard ing we could be a political powerhouse. Ya’ just never know Laraia and Larry Massey. A good time was had by all, and our until ya’ try. members contributed to some timely discussions. The format revolved around four discussion topics with an afternoon Topic #2: Strength in numbers: Could we all get along? devoted to visiting our congressional representatives. Terry and TR: As a first time participant in the LDAC and a relatively new Richard L. visited with Josh (Legis. Asst.)at Rep.Tom Tancredo’s member of the AI, I found it best to observe more than partici- office. Richard M. (and son, a student at American U.) visited pate in this discussion. It was a general consensus in my dis- with Bob Beauprez and Diana DeGette’s office, and Larry vis- cussion group that the AI can stand on it’s own and an alliance ited with the staffers of Senator Ben Knighthorse Campbell. Our with other organizations is not needed. It was noted, however, specific issues were: supporting House Bill HR1030 that would that the AI is currently working to coordinate with other organ- change the IRS Tax Code to allow depreciation of tenant izations in areas of publications and politics. improvement over 10 years instead of 39 years, and support for an amendment to House Bill HR833 requiring Federal Agencies RL: This session reiterates that AI is the place to be. AI takes the to direct their charges and constituencies to address inappro- lead with the issues that affect us. priate client pressure on appraisers. LM: Our group concluded that the “strength in numbers” Extra-curricular events included the usual monuments and approach would be a worthwhile endeavor so long as these museums. LDAC arranged an embassy tour that Richard M. efforts did not diminish or dilute the power, influence and details in a sidebar. image of the Appraisal Institute in the eyes of not only the Here are the topics discussed, and some of our reflections: industry, but the public’s perception, and the overall legislative environment. Many felt this could be best accomplished Topic #1: Taking control: through a sharing of resources, writings, and references rather Transforming the AI into a political powerhouse. than through some collective professional “coalition” or TR: This discussion brought up some really good points; and “umbrella” legislative affiliation. The single largest question Kelli Kline, the discussion leader, was very enthusiastic. As that remained at the end of this discussion was—“since the appraisers do their job day to day, many don’t think about the efforts, the dollars and the existing involvements are now (and role that government plays. In fact, local and national govern- likely would continue to be) shouldered by the ‘influence’ ment play a huge role in our business. There are laws on the undertakings of the Appraisal Institute—where would the ‘real’ table every day that affect the appraisal world. We should have benefits to the Appraisal Institute be found?” a larger role in deciding our fates, and some real good ways of RM: This is a continuation of discussion of the “umbrella” getting more involved were discussed. organization issue discussed last time. To refine it consistent RL: “You do make a difference”. You have the opportunity to with the latest status, the discussion focused on possible areas talk to your elected officials and let them know the issues that where we could cooperate with other organizations: govern- are impacting your business. Get involved. Stop by the local ment relations; education; and publications. In my group, gov- office or e-mail you positions. They listen. ernment relations was noted as already being coordinated with the ASA’s, but education and publications are proprietary. We in LM: A great deal of the discussion here focused on how im- the AI own them. Gary Taylor, the AI president for 2004, spoke portant it is to follow-up on the above task . . . “as soon as we of the “717 initiative” where the AI endeavors to “take back the return to our chapters and region(s).” The LDAC opportunity to streets”, recovering its market share of appraisal education. In address the “issues” as we did during this conference should my group I did not hear resounding approval for alliances with become the culmination of this “transformation” effort rather other appraisal organizations, except for in the government than the beginning. Many good thoughts and ideas were pre- relations arena. sented by a number of candid and caring professionals. RM: Thank goodness for energetic people! The kind of people Topic #3: Is the AI impeding its growth? that match their energy with optimism that spills over and A look at designation requirements. charges others to action. This was the most uplifting topic, TR: It was the general consensus that the bar should not be addressing the government relations on all levels. The theme lowered for designations. However, no one was in favor of the comprehensive test. My group did agree that additional desig- nations should be looked at simply due to the fact that mem- bers seeking their designations have declined over that past four years. RL: Members that are already desig- nated seem to not The Capitol Building in April with all of the Rep. Clay Shaw (R) FL want any changes. Richard Laraia and Terry Ruth met with Cherry blossoms in bloom. Truly a special addressed the LDAC Members working Josh, Legislative Assistant from Rep. Tom time to be in Washington, DC. luncheon. on a designation Tancredo’s office.
Page 6 Sidebar: Embassy tours in Washington D.C. — April, 2003 Richard C. Mosier, MAI The Appraisal Institute’s Leadership De- velopment and Advisory Council arranged through FIABCI (A French acronym for an international organization translated to “the International Real Estate Federation”, of which the AI is a principal member) a A lighter moment - Terry Ruth is trying to pass Appraisal A break from all of the tour of embassies in the D.C. area. Two Institute legislation. activity - Terry Ruth and busloads of LDAC’ers and FIABCI strangers Richard Laraia during one made the trek. of the LDAC sessions. Our first stop was the German Embassy, nestled into the Georgetown neighborhood offered suggestions such as “more help on-line”, “better explanations as to demo northwest of the Mall. The 3- to 5-acre requirements”, and “more local classes”. compound is in hilly country with lots of trees and surrounded by modest-looking, LM: Considerable discussion over this topic raised numerous questions, comments although certainly not modest-priced, sub- and concerns at both ends of the “designation requirements” spectrum. Some par- urban single-family homes on small lots. ticipants advocated a strong recruitment undertaking of PhD and Doctorate level The homes were built in the ‘30’s to ‘50’s, prospective members in order to set a higher standard of professionalism within the and the German Embassy was built in the Appraisal Institute, while others argued for the elimination of either the compre- ‘60’s by my guess. The grounds were hensive exam (with greater emphasis on the demonstration appraisal report) or, the fenced and the security gate was not too incorporating of greater report writing skills into a more “study/course-real world imposing. The buildings are just office- experience” oriented comprehensive exam, along with a reduced (or eliminated) looking buildings, but I’m sure a residence emphasis on the “demo” report. A renewed consideration toward a mandatory is designed in there somewhere. It had look “mentoring” program was discussed, as well as the re-employing (in some form) of of modern German functionality. We a previously successful “Review for The Comprehensive Exam” course or work- assembled in a meeting hall and heard the shop. pitch about doing business in Germany, RM: In this session I heard many gripes about the comprehensive exam and experi- and took home some brochures and eco- ence reviews, but no one wanted to lower the bar. Broaden-the-bar ideas got some nomic data. The speaker was an economist wary approval. that answered many questions, but when asked where to get a good German beer, he didn’t quite know, as he prefers Samuel Topic #4: Competency: Are we frozen in time? Adams. TR: The overwhelming attitude in my discussion group was that there is nothing The next stop was the Taiwan Repre- wrong with appraisers competency. The fingers were pointed at realtors, home- sentative’s compound, which is not an owners, and mortgage brokers. These were the ones in need of education. It would embassy. Our “One China” policy precludes be wonderful if this were always that case. However, it was noted that changes occur this having the status of “embassy”. Also in so rapidly in this field, that required continuing education is one way to try to get the NW area, it is a larger estate, 18 acres, appraisers on the same page. known as “Twin Oaks”. It’s a beautiful hill- top estate surrounded by trees, in the center RL: Some of the “older” members actually expressed the notion of doing away with of which is an 1888 summer home built by licenses. They were politely told that licenses are here to stay and that the require- Gardiner Greene Hubbard, founder of the ments are going to be raised. East coast members are pushing for national stan- National Geographic Society. Aside from a dardization for they hold multi-state licenses. garage and a few outbuildings, the mansion LM: Some in our group continued to blame federal and state licensing for the de- is the compound. The Taiwan representa- cline in competency compliance. Others however concluded, that this is all too often tive may live on the upper levels, but the an excuse rather than a reason. The latter felt that “competency compliance” rested first floor was devoted to entertaining. primarily with the individual, as opposed to some “teachable” skill. “You either And the Chinese are very gracious and choose to do what is required . . . or you don’t”, they suggested. Client pressure was generous hosts. There was a full buffet also discussed at great lengths, and many felt that this may be one of the single most meal with refreshments that nobody significant reasons for “compe- expected. There were handouts and speak- tency” non-compliance. ers here, too, but it was very touristy, tout- ing the beauty of the island of Formosa. RM: This topic discusses the rel- “Never mind coming for business, just evance of licensing (that most come see us because we are so beautiful.” It everyone agrees is not a good was kind of like a time-share presentation; measure of competency) and just no pressure to sign anything. Our hosts other models, such as a periodic competency test proposed for presented some plaques to some other the accountants through AICPA Chinese people. Even though someone (that nobody in the discussion explained what was going on, the program group likes either). It’s hard to was all spoken in Chinese. There was Lots overcome the attitude: “I have of applause, lots of photos, lots of grins and my state certification and I went handshakes. I’m sorry, but I could not shake the suspicion that the plaques went up on a the extra distance to get my AI Colorado Chapter had 4 members at the LDAC Meeting shelf to present again when the next bus- designation; I’m competent; (l to r) Terry P. Ruth, Richard C. Laraia, Richard C. load arrived. How did I become so cynical? leave me alone!” Mosier, MAI and Larry C. Massey.
Page 7 Letter to the Editor: EDITORIAL West Foster’s recent article on the contributions of various Colorado Chapter members to national committees was very RAMBLINGS nicely done, but unfortunately quite incomplete. One of the most dedicated life-long career volunteers was omitted – himself! By W. West Foster, MAI This was likely not due to an oversight, but to humility. Well, I’m here to “rat him out.” West has been involved in national committee work for When I entered the real estate appraisal business with Bob the Appraisal Institute or AIREA since 1982 when he served Mitchell, our word processor was an advanced proportional on the National Division of Curriculum. Did you know he’s spacing IBM typewriter. Have things changed since then! been a contributor to every edition of The Appraisal of Real th Jerry Moore had the most advanced system around in the Estate since the 9 ? mid-1970s, an IBM memory typewriter that took Rosalie to West was a regional representative for Region II from 1991 figure out how to operate it. In the late 1970s and early through 1995 and served as Regional Vice Chair in 1995 and Chair of the Region in 1996 and 1997. This position put him 1980s, several word processing systems appeared that uti- on the National Board of Directors as well. lized 8-inch floppy drives. They were cumbersome to use, Since 1996, West has served as either the National Chair, would only do word processing, and were adopted mainly by Ethics Administration Division, or as National Chair of the attorneys. Jerry Moore and I each bought IBM Ethics and Counseling Committee, a position he continues to Displaywriters, which was one of the several systems avail- hold this year. His greatest contributions, in my opinion, have able. They produced beautiful documents with noisy print- been in the area of ethics and counseling where he was instru- ers; but four years later, I sold mine for less than 5 percent mental in the major streamlining several years ago that resulted of what it cost. Wang and Digital Equipment had their own in the efficient system we have today. The organization owes a operating systems, but they were more in the category of great deal to his vision and insight into the peer review process. mini-computing at system costs that far exceeded the budg- West is the most recent recipient of the Colorado ets of most appraisers. Chapter’s “Distinguished Service” award. Brian Goodheim was instrumental in pioneering the way I guess he forgot all of this when he was writing his arti- to bring microcomputers into the appraisal profession. He cle. But, “enquiring minds” wanted “the rest of the story.” developed software under an Oasis operating system running Bonnie D. Roerig, MAI on Altos and Tandy microcomputers in the late 1970s. At about the time Brian was working with Oasis, Digital Research was pushing CPM that it had developed. However, “Quality without Quantity” Microsoft Basic was the standard language at that time. Brian by Donald E. Boyson, MAI, SRA asked Bill Gates at a panel meeting if he had heard of Oasis and what his thoughts were about its future. Bill responded Members of the Appraisal Institute and the Royal Institute of that he had studied the code and that it was a good operating Chartered Surveyors. Colorado is currently home to two fine chaps who are affili- system, but the developers did not understand business. ated with these major organizations and who exemplify the best Mike Keefe, after typing FNMA forms for years, felt that qualities of the appraisal profession: there had to be a better way and hired a programmer to • Academic excellence develop PC software that allowed the forms to be filled out •Broad international experience more efficiently. Although it worked, it was not ideal. •Ethics and integrity At about the same time, a few of our members embraced Ivor Hill, MRICS and candidate for MAI was born in Sheffield Apple and certainly had the advantage at that time. A friend (The Full Monty) England and currently handles commercial and in Colorado Springs, who used Apple systems, told me that eminent domain assignments for Colorado Realty Reports in Pueblo. anyone could be an Apple expert. However, Apple has been He completed a Masters Degree in the UK and has worked as the preferable system for graphics artists and non-business a Quantity Surveyor on England’s motorway system. He lived for applications. a period of time at Walls End, the easterly limits of Hadrian’s Bonnie had one of the first portable computers, a Compaq Wall — Rome’s answer to the Great Wall of China and built to Luggable. During the time I had the IBM Displaywriter, Bill keep out the heathen Scots, such as Sean Connery! Gates succeeded in convincing IBM to embrace MS DOS for Ivor has also completed valuation and consulting work in all of their PCs, which became the industry standard; and I Toronto, Canada, Albuquerque, Fargo and the metro Denver acquired an IBM PC for spreadsheet applications. Dennis area. In Colorado, he was affiliated with Valuation Research Lou Ginther and I, not knowing either were going, went to Garone and Nathan Medvidofsky. Ivor says that relearning the Minneapolis to take one of the first Lotus 1-2-3 courses “English language” caused his spell check to achieve overdrive. taught by Jim Mason for AIREA. Ian MacKinnon, MAI, SRPA, FRICS is a native of Belfast, Northern My first experience with the PC for word processing was Ireland but grew up in Southeast England. Ian’s father was one of “The Few” — a pilot and survivor of the Battle of Britain. Following using WordPerfect, but it did not have a compatible spread- completion of his formal education and qualifying as a member of sheet. The word processing program had to be shut down in the Royal Institute of Chartered Surveyors in 1973, he moved to order to run the spreadsheet program. The residential form Australia and added Associate membership Australian Property programs have been equally as frustrating as they have Institute to his credentials. From 1975 to 1980 Ian worked in the evolved. What a difference from then until now! Virgin Islands and finally arrived in God’s country in 1980 where he I am sure that each of you has similar stories of struggling completed the course work and comprehensive for the MAI. to get where you are today. There are many who do not par- Specializing in litigation, Eminent Domain and consulting, ticularly care for Bill Gates, but I am not one of them. If it Ian is a partner in Integra Realty Resources Denver, an affiliation were not for his clout to force standardization in the PC of appraisal offices offering “Local Expertise Nationally.” industry, our productivity would not be anywhere near what Note: Reminder from a fellow Brit and former apprentice to a it is today; and we must not forget to thank Al Gore enough FRICS — If we hadn't lost the Revolutionary War, you wouldn’t for inventing the Internet. have anything to celebrate on July 4th! Page 8 Education Recap
The first of four C-400 – 7-Hour National USPAP scheduled in Colorado was on April 1st. Peter D. Bowes, MAI, instructed 35 students in Grand Junction. Everyone benefited from his expertise and general knowledge.
Then Course 400, 7-Hour National USPAP was also held in Denver on May 9th with 105 in attendance. The instructor again was Peter D. Bowes, MAI, and Stewart Leach, the Program Administrator for Appraisers discussed the Rules and Statutes for the state of Colorado. Course 600, originally scheduled for March 20 and 21, 2003, was cancelled due to the “Big Snow.” Sixteen students attended the resched- Highest and Best uled Income Valuation of Small Mixed-Use Use and Market Properties on March 27 and 28, 2003. Analysis, C-520, held June 9-14, Clifford L. Cryer, MAI, SRA who instructed 2003 had 42 in Course 600 also instructed Course 620, attendance with six Sales Comparison Valuation of Small Mixed-Use designated mem- Properties, as scheduled. Included in the 25 bers from the students attending, ten Colorado Chapter Colorado Chapter designated members took advantage of the taking advantage of one-half price fee to acquire some continuing the one-half price fee. education hours. E. Nelson Bowes, MAI (right) and Stephen F. Fanning, MAI (left) instructed this course.
They Went That-A-Way CLASSIFIEDS CORRECTION: W. R. Blazer McClure David B. Kerr, SRA NORMAN J. ROBERTS, SRA 5670 W. Mansfield Ave. [email protected] was reported terminated. Denver, CO 80235-3111 Charles H. Kurfehs, III, MAI Please visit the Chapter This was an error. Phone: 303-763-8167 [email protected] Mr. Roberts is in good standing. Richard Muegge, MAI Elizabeth A. Newman, SRA website, www.colo-ai.org We apologize for any inconvenience 1230 Pleasant View Lane [email protected] That this may have caused. Colorado Springs, CO 80921 under “Employment John (Jack) W. Nisley, MAI Phone and Fax – no change [email protected] Opportunities, etc.” to view ADDRESS CHANGE Terri Odenweller, MAI Philip G. Umhoefer, SRA Christopher N. Baker, MAI NorthMarq Capitol, Inc. the “Classified Ads.” [email protected] CB Richard Ellis 6300 S. Syracuse Way, Ste. 250 1110 – 17th St. Centennial, CO 80111-6788c Christopher S. Weaver, MAI Westin Hotel Ground Floor Phone: 303-225-2120 [email protected] If you want to place an ad, Denver, CO 80202 Fax: 303-200-4840 Phone & Fax – no change TRANSFER IN FROM please e-mail Daniel Kinkela, MAI E-MAIL ADDRESS CHANGE ALBUQUERQUE [email protected] 1535 Jubilee Ave., Apt. 402 Marvin D. Ballantyne, SRA, SRPA Ivor J. Hill Victoria BC V8R 4N4 [email protected] Colorado Realty Reports CANADA 107 W. 11th St. Scott M. Bowie, SRA Ads are free – 50 words or Phone: 250-387-6014 Pueblo, CO 81003 [email protected] Fax: 250-953-3094 Phone: 719-544-1771 less – and they will be E-mail: [email protected] David L. Clark, MAI Fax: 719-544-1722 posted on the website Dennis M. Danek, SRA [email protected] E-mail: [email protected] Danek & Co. Douglas B. Foley, MAI, SRA within 48 hours. 222 Knox Ct. dougfoley@comcast.net TRANSFER OUT – Denver, CO 80219 James T. Garber, MAI GENERAL ASSOCIATE Phone & Fax – no change [email protected] Edward J. Hennessy Steven C. Groh, MAI Lesca L. Grant, SRA Hennessy Real Estate Appraisal InterWest Appraisal, Ltd. [email protected] 2723 Francis St. 6688 Gunpark Drive East, Ste. 102 St. Joseph, MO 64501-3250 Terry K. Hartlieb, SRA Boulder, CO 80301 Phone: 816-364-2898 [email protected] Phone: 303-527-3500 E-mail: [email protected] Fax: 303-527-3501 Joseph L. Hastings, MAI Appraisal E-mail: [email protected] [email protected] RESIGNED ™ Loren J. Hess, MAI, SRA MaryKay Kelley, SRA Courtney A. Antonation Institute [email protected] Centennial Appraisal William A. Ebert Professionals Providing 2345 Spruce St., Apt. C Dorothy E. Kellogg, SRA Eileen Pero Real Estate Solutions Boulder, CO 80302-4635 [email protected] Phone and fax – no change Page 9 Edward B. Horton, MAI, SRA, National SREA President–1966 Passes Away
Ed Horton, past national president of the Society of Real Estate Appraisers, passed away April 11. He was 80 years old. In addition to being the 1966 Society President, Horton was a regional vice president of the American Institute of Real Estate Appraisers. Horton is survived by his wife, Gail, and five daughters, all six of whom he had named orchids after, orchid raising being a long- standing hobby of his. After collecting parakeets, of which he had over 300, he turned his attention to orchids, eventually garnering over 3,000, and all had certificates from the Royal Horticultural Society in England for the orchids he had grown. Below are comments made by a few of Ed Horton’s contemporaries.
Ed Horton successfully completed several very unusual assignments. He One of the programs on the Fox News Channel has a tag line that made the feasibility study that enabled Denver to finance and build the goes, “Fair, Unbiased and Unafraid.” This describes Ed Horton. If you 16th Street Mall, seeking data from all over the U.S. With T. C. Hitchings, are going to have a competitor in the appraisal profession, Ed was the MAI. Ed appraised several million acres of former Indian land in the best kind to have. He knew the rules, abided by the rules and prac- northwest, with a valuation date in the mid-1800’s, requiring extensive ticed ethical standards above and beyond the rules. He was a well- research into historical sales data. Ed Horton’s work made contributions respected and professional real estate appraiser long before we were to society considerably beyond his untiring efforts for our appraisal a Profession. He was also a very good friend, and I will miss him. organizations. He was indeed one of Denver’s premier MAI’s. William T. Van Court, MAI Robert S. Arnold, MAI
In 1970, when I was the president of Chapter #9 of the Society of real Estate Appraisers, Ed Horton and I have been lifelong Ed and I had breakfast at the Society’s convention in Las Vegas. We talked of many things, friends. Our fathers were friends and including the future of the Appraisal Profession. We thought it would add prestige to the des- cohorts in the real estate business in ignations if they were to be licensed by the state. We felt it would be necessary to have one of Denver starting back in the 1920’s. Ed and I the designations, MAI or SRA before getting an appraisal license. The final result has been returned from duty in the Navy and Army that an appraiser could get a license without being a member of an appraisal organization. Ed after WWII and each went into business and I have since agreed that things went backwards fromm our original intent. So be it!!! with his dad. During the year of 1946 about Edward C. Lana, MAI, SRA 10 or 12 of we “veterans” started a group of “sons-of-brokers” who were in business with their Realtor dads. We were, of course, If you weren’t a member of the Society He was an able Real known as the “S.O.B.s”, but we learned the of Real Estate Appraisers in the 50’s or 60’s you Estate Professional and a business rapidly and thoroughly from our might not remember Ed Horton. Besides being valued friend. He will be missed. dads and exchange of ideas (and listings) president of Chapter 9 he was also National Eugene G. Bowes, MAI with each other. The S.O.B.s hung together, President. Ed was a motivator and a mentor to not only to get started in our profession, but many of us. It was because of Ed and other for years after as we each moved in broader SOB’s (sons of Brokers) that I became actively circles of endeavor. As President of Midland involved in Real Estate Appraising. If you don’t Ed Horton ranks among the finest Federal Savings & Loan Association, I was remember the SOB’s ask Bob Arnold. Ed was and most respected real property delighted when Ed agreed to serve on my driven to know everything he could about a appraisers in Denver, and for that mat- Board of Directors and remained in that variety of subjects including real estate apprais- ter, in the United States. By his actions position through our merger with Western ing to raising parakeets, tropical fish, or and by my association with him I Federal S&L; our creation of Bank Western orchids; he studied about each and wrote arti- learned the importance of ethics as an and Western Capital Investment cles about appraising as well as books about appraiser. Whenever I had an appraisal Corporation and our ultimate sale of this orchids. He was most recently honored for his problem, he was always available for largest financial institution (at that time in work with orchids. He even grew several new counsel. I never thanked him for his early 1980’s) in Colorado. Today the succes- varieties of orchids and named them after fam- contributions to my appraisal career, sor organization, after three subsequent ily members. The Institute has lost a great but somehow, I know that he knows. sale transactions is U.S.Bank. Thanks, again, Ed……….! Rollin D. Barnard member and me a good friend. Thomas R. Olmsted, MAI Lyle Hansen, MAI, SRA President of Midland Federal S&L Assoc. when Ed was on the Board of Directors
The Wampler family lived in the 1000 block of Jackson St. and the Horton family lived in the 1100 block of Harrison St. in the 1930’s and 40’s, or about one block apart. The public schools for that area of east Denver were Teller, Gove and East. Neighborhoods I never knew Ed well, didn’t meet with him often. being real things in those days, all the kids and most of the parents knew each other. He taught the first class I took in appraisal. He was also a Our parents knew each other and occasionally played bridge, although I am not sure member of the Board of Directors of Midland Federal whether their acquaintance was due to being neighbors or from other social or busi- while I was there. Some people you don’t have to know ness channels. well to recognize that they have class. That was Ed Ed was five years older than me and though my sister, Marty, who was three years Horton. The profession has lost one of its best. The rest of older than he, was gorgeous, I thought the same thing of his sister, Joyce, who was two us are better for having known him as teacher and friend. Forrest F. Leigh, SRA or three years older than me. Ed had very little to do with me in those years because he was so much older, but still we knew each other. Everybody called me “Whizzy” because that was what people thought they heard when I was learning to say my name, “Wilson”. It later got shortened to “Whiz” but I think Ed always said “Whizzy”. After about 1942, when Ed graduated from high school and went off to the Navy, I I became associated with Ed in 1966 when he was don’t remember any contact with him until I got into the real estate business in 1963. International President of the Society of Real Estate Then we inevitably met again (he always mentioned my sister whenever I saw him) Appraisers and continued the association for nine years. Ed and I remember his father, Bennett, discussed our families once or twice with me. was a truly professional appraiser and teacher. He was a From then on, of course, I had contact with Ed until just a few months before his wonderful person to be associated with because of his death. pleasing personality and interest in real estate valuation. It I am sure many of our Institute members knew Ed better than I did, because they was a very enjoyable 9 years of working together. knew him just in maturity; however, I doubt anybody knew him longer. Alden Gullickson, MAI, SRA Wilson W. Wampler, MAI
Page 10 Valuation Conferences Provide Overview of Appraisal Opportunities/Challenges By Mark Linné, MAI Though the Appraisal Institute was forced to cancel its annual confer- A “valuation innovation” session suggested that intuitively, more time ence due to the SARS epidemic, a number of conferences have included and resources should be spent in the industry on identifying the “easy” both Appraisal Institute participants and presentations, or other material valuations and setting them aside for other than review by a professional relating to valuation issues and of importance to our membership. Three appraiser. He suggested the established practice of scrubbing appraisals conferences in particular are worth noting: with an AVM to identify problematic results was backwards, and that The FNIS Valuation Innovation and Leadership Conference, held in using appraisals to follow up on problematic AVMs made more sense. Laguna Beach, California May 28-30, 2003, focused on the mortgage lending industry but presented much that was of value to residential and Realcomm 2003: AppraisalTech commercial appraisers. Realcomm is the nation’s pre-eminent real estate technology conference Appraisal Institute representatives included AI President Alan and focuses on integrating technology to enhance productivity and sim- Hummel, SRA; John Ross, AI Executive Vice President; AVM consultants plify the transactional process. For the first time, Realcomm teamed with Steve Kane, Mark Linné, MAI, and George Dell, MAI, SRA; Cheryl the Appraisal Institute to present AppraisalTech 2003, a specialty pres- Chirpich, 2004 Chair of the Residential Council; Jim Garrett, MAI, 2004 entation that focused on changes and opportunities for the appraisal pro- Chair of the General Appraisal Council; and John Cirricione, SRA, AI fession, as well as opportunities specifically represented by technologi- technology consultant. cal innovation. With the cancellation of the 2003 Toronto conference, Panelists and attendees grappled with a number of issues surround- Realcomm provided a venue for the Institute to present some of its most ing the adoption of appraisal alternatives. Underpinning most of the dis- cutting edge programs, including Appraisal Valuation Modeling (AVM), cussions was the following: is the objectivity of an automated model a Mark-to market (M2M) and emerging data standards, data resources solution to artificially inflated values – or has the lending community and standardized commercial appraisal report formats. itself behaved badly? Bill McKay, senior vice president of New Century Presentations included both shorter technology/process oriented Financial, and a presenter at the conference, noted “In the consumer programs, as well as longer instructional presentation put on by some of finance industry – before we had ‘subprime,’ we had ‘consumer finance’ the Appraisal Institute’s leading theoreticians and industry experts. – if you tried to influence an appraiser, you got fired. It was taboo to do Sean Hutchinson, former president of Integra and a former vice pres- that. That’s changed today.” One highpoint of the conference was the presentation of preview ident of the Appraisal Institute, made a presentation that borrowed from results from the upcoming Appraisal Intelligence National Appraisal “The E-Myth” to urge appraisers to systematize the appraisal process to Survey 2003. One response that resulted in significant discussion and achieve greater operational efficiencies. A second presentation by John concern: 89 percent of respondents said they had felt pressure to hit a Wood on Marshall Valuation’s M & M Connect focused on the opportuni- number from a mortgage broker in the last year. “That number shocks ties represented by the database and valuation tools within the software. me,” said Joe Kohout, vice president of Nomura Securities, a secondary The Emerging “Mark to” Market Valuation for Financial Reporting market investor. But the fact it goes on did not shock him, he said. Purposes was a joint presentation by Jeffrey D. Fisher, PhD, Professor of Nomura uses “secondary valuation products” to run reviews of loans Real Estate, Director Center for Real Estate Studies, Kelley School of whose values are flagged as questionable. During such reviews, they find Business, Indiana University; Bruce Kellogg, MAI, Managing that the comparables the secondary review selects are almost always Director/Valuation Advisory Services, Cushman-Wakefield; and John closer in proximity to the subject than in the original appraisal, Kohout Ross, Executive Vice President of the Appraisal Institute. said. “This suggests appraisers may in fact be pressured to hit a certain The presentation focused on the background of Mark-to-market (M2M), number,” he commented. “Between 15-30 percent of appraisals that we the forces driving the changes, the impact of the Basel accords, and what look at are over valued by at least 15 percent,” said Mike Ousley, EVP of will be required of appraisal firms to compete in this new environment. FNIS Appraisal Enhancement Services. “That’s a staggering number.” Daniel Bajadek, MAI, CRE, Vice President of CB Richard Ellis, Inc./Valuation and Advisory Services, noted that the basic issue that – 89 percent of survey respondents indicated they had felt pressure to hit a number from a mortgage broker must be recognized by appraisers is that we must consider that the – 66 percent reported such pressure from a loan officer; 63 percent from greater market transparency that is required for assets of all types a borrower requires a greater expertise in Valuation for Financial Reporting pur- – 60 percent from a real estate agent poses. The immediate impact of the M2M provisions of Sarbanes-Oxley – 29 percent from a vendor management company. directly influences who can and cannot be involved with the valuation of real estate. The survey choice “anyone else” drew no affirmative responses. There are a number of forces directly driving the M2M initiatives, While a mere 4 percent responded that the most common reason they including those market players most directly involved, namely investors, declined an appraisal assignment in the past year was “asked to over- business, and regulatory interests. state value” or “payment conditioned on value,” fully 26 percent said the Challenges for appraisers include the definitional differences repre- most common reason was a bad previous experience, either with the sented by the financial valuation sector, according to Harold Perry, Jr. MAI, client (16 percent), loan officer or mortgage broker (six percent) or ven- Partner, Ernst & Young/Real Estate Advisory Services. The key is finding dor management company (4 percent). the proper manner of fitting valuation and accounting together. A keynote presentation by Patrick Stone, CEO of summit sponsor Additionally, defining the scope of work presents challenges that must be Fidelity National Information Solutions (FNIS), touched on the issue as overcome. At the same time, appraisers have unique strengths due to their well. According to FNIS data, in 1992, five percent of mortgage fraud interdisciplinary knowledge; they are at once real estate economists, cases had a valuation component. That number had risen to 17 percent financial analysts, and appraisers. All of these represent opportunities. by 2002. Appraisal Institute President Alan Hummell, SRA noted after- Appraisers wishing to explore this area further would be well situ- ward that the rise in valuation components of mortgage fraud also coin- ated by beginning with the most recent accounting pronouncements, cided with the onset of state licensing. including: A Thursday morning panel session on “The Science (and Art) of –Financial Accounting Statement Valuation Risk Forecasting” featured David Rasmussen, Vice President of –FAS 142: Goodwill and Other Intangible Assets Veros Software; Susan Barnes, Director, Standard & Poor’s; and Dr. –FAS 144: Accounting for the Impairment & Disposal of Long-Lived Michael Sklarz, Chief Valuation Officer of FNIS discussing the fusion of Assets borrower and collateral information in risk management, as well as –FASB: Interpretation 45 forecasting future values using leading economic indicators. Rasmussen –FASB Interpretation 46 asserted that appropriately weighing factors such as unemployment, –FASB 146 Fair Value Reporting. interest rates, inflation and population trends could and should be used to predict value 12-18 months from loan date, to assess risk during the Practical Applications in Appraisal Valuation Modeling was presented most common window of repossession. by Mark Linné, MAI and M. Steven Kane, both of Denver. This four-hour The secondary market’s use of appraisal alternatives was featured in an instructional seminar was based on the Appraisal Institute AVM Seminar afternoon session, with George Westfall, managing director of GMAC/RFC developed by Steve Kane in 2002, and presented across the country since in charge of the top-ten originator and servicer’s mortgage credit risk that time. The presentation focused on topics from the AVM seminar as group, noting that his company is “right in that camp” with “almost no busi- well as excerpts from the new Appraisal Institute text, “Practical ness” being done with AVMs on first liens. However, half the loans Applications in Appraisal Valuation Modeling”, slated for a September, GMAC/RFC bought last year went through some sort of alternative valua- 2003 publication. Topics presented included: Valuation Using the Whole tion, with half of those – one quarter of the total – getting an AVM value. (continued on next page) Page 11 The “Antique” Appraisers (continued from previous page) by Donald E. Boyson, MAI, SRA Market; USPAP Requirements; Current Practice; History of AVM Development; AVM History: Evolution or Revolution?; Competency A couple of times each year a group of the “Elderly Statesmen” of the Issues; Fundamentals of Analysis. Colorado Chapter of the Appraisal Institute gather to exercise their Many of these presentations will be available in the 2004 Appraisal ability to recall and relate. This special group was started by John E. Institute conference in Toronto, Ontario, Canada, providing additional Bohling, MAI three years ago and is ably continuing through the opportunities for practitioners to understand the forces that are shaping leadership of Edward C. Lana, MAI, SRA; Thomas R. Olmsted, MAI the profession, providing opportunities to those who are willing to adapt and William T. Van Court, MAI. to take advantage of the opportunities shaping the profession. With an average age of 76, many wear glasses and hearing aids and have survived a variety of age related sicknesses. 2003 Predictive Methods Conference, held in Newport Beach, Attendance at these gatherings varies due to limitations: California, focused on predictive technologies that are re-shaping the Ed Horton — recently deceased mortgage lending fields, and by extension, the appraisal field as well. Ev Spelman, jr. — hospitalized following a stroke The conference focused on topics ranging from the current state of Lee Laffoon — in a nursing home with his wife AVMs and the analytics that improve effectiveness and usability; includ- ing Real Estate Collateral Scoring; Forecasting Market Stability and All of the “antique” appraisers hold the MAI designation, have dis- Future Home Values-Peering Into the Future; and AVM Testing-Looking tinguished record of leadership both locally and nationally and rep- Under the Hood. resent a mix of fee and staff careers. One of the highlights of the conference was the presentation by Dr. Many have served on national committees, held national and Christopher Cagan, Director of Research and Analytics with First chapter offices and all have served their country in various branches American Real Estate Solutions (FARES), who told attendees that the of the military during World War II, Korea and other conflicts. national real estate cycle shows no signs of slowing in the near term. Most of all, these gentlemen personify the reason why Colorado Among the key reasons why the nation’s real estate cycle will continue appraisers are held in such high esteem nationwide. its upward swing is federal policy. Cagan noted that “while President Bush’s geopolitical and budgetary policies are what might be expected from a conservative Republican, including tax reductions, the monetary policies of Bush and the Fed are those of liberal Democrats: many inter- est rate reductions, money expanding at a high rate, “ Cagan explained. “Very bluntly, will President Bush and Alan Greenspan allow a recession in the real estate market that has been sustaining our economy.?” Cagan cited a presentation by Evan F. Koenig, vice president and Jim Dolmas, senior economist of the Research Department of the Federal Reserve Bank of Dallas to support his assertion that the Federal Reserve would potentially consider using somewhat extreme measures to keep interest rates very low for consumers and business. “By coordinating with fiscal policy,” Cagan noted, “the Fed could even implement what is essentially the classic textbook policy of dropping freshly printed money from a helicopter. The Fed would monetize government debt that had been issued to finance a tax cut.” Cagan felt that only terrorism or a lengthy future war would be the unpredictable “wild card” which could They’re still smiling! Seated (l to r) Edward C. Lana, MAI, SRA; Joe throw the economy further off balance and devastate any government Montano, retired “good” lawyer; Robert J. Mitchell, MAI. Standing (l to r) intervention. are William T. Van Court, MAI; Donald E. Boyson, MAI, SRA; Thomas Perhaps the most intriguing presentation related to the performance R. Olmsted, MAI; Julian L. Rede, MAI, SRA; Jack M. Muse, MAI, SRA; testing of AVMs. There is presently an effort by AVM providers to Jerry S. Moore, MAI; Blaine B. Chase, MAI. Hats off to all of you! enhance their acceptance within the lending community by demonstrat- ing their internal due diligence efforts, including testing and analysis to determine true performance in a production environment. In addition to AVM standards promulgated in early June 2003 by the International In Memoriam Association of Assessing Officers for the private sector, additional stan- Gary R. Gardner, MAI dards have been presented by the Collateral Risk Management Consortium in their Guide to Automated Valuation Model Performance Gary R. Gardner, MAI, passed away March 21st. He had a Testing and VeroVALUE’s AVM Testing and Analysis For True stroke and died of pneumonia. The Chapter expresses Performance. sincere condolences to his family and friends. All of these standards will be undergoing both private sector and fed- eral scrutiny in the upcoming months.
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